Hiring the first employee: an international exploration on the considerations leading to job creation by the solo self-employed

Albert Kraaij and Saskia Rademaker

Chapter 9 in Unlocking Regional Innovation and Entrepreneurship, 2021, pp 185-217 from Edward Elgar Publishing

Abstract: The world needs more jobs to meet United Nations Sustainable Development Goal 8 and to keep up with expected population growth. Policymakers stimulate start-ups due to their expected job-generating effect. Despite the increased number of solo self-employed, percentages on graduation from small to larger enterprises are low. This study focuses on entrepreneurs who create jobs and have passed ‘the one-employee threshold’. What are the considerations of the solo self-employed when making the decision to hire their first employee? 27 Interviews were conducted with entrepreneurs in developed and developing countries. The analysis shows that solo self-employed have considerations about time, skills, trust and opportunities when hiring their first employee. The study finds evidence of effectual behaviour. Trust is important: trust in others (the first employee) and trust in yourself (becoming an employer). To stimulate job creation, policymakers should stimulate effectual behavior that enhances the self-efficacy of the solo self-employed.

Keywords: Economics and Finance; Geography; Innovations and Technology; Urban and Regional Studies (search for similar items in EconPapers)
Date: 2021
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